Cheung Chi-fai – Updated on Feb 28, 2008 – SCMP
The first-registration tax for commercial vehicles meeting stringent Euro V emission standards will be reduced or waived in the hope of improving roadside air quality.
Taxis, minibuses and non-franchised buses will enjoy a full tax waiver, while owners of goods vehicles will pay 30 to 50 per cent less, depending on their weight.
The government will lose at least HK$26 million in revenue if 15 per cent of new vehicles are cleaner models. But only two Euro V vehicle models are available.
According to the government’s timetable for upgrading vehicles, the Euro V standard – which reduces permissible emissions of nitrogen oxides by more than half from Euro IV levels – will become mandatory next year.
In April the government launched a scheme offering HK$3.2 billion in grants to replace pre-Euro and Euro I commercial vehicles. But Johnson Li, secretary of the Motor Traders Association, said he feared some people now running old diesel vehicles might further delay their plans to replace them, given that Euro V vehicles were nearly non-existent in the market.
He said it was difficult to say whether the extra concession would give a boost to the grant scheme. Only about 5 per cent of 74,000 eligible vehicles have been replaced.
Aaron Yeung Wai-hung, director of Argo Bus Services, said that under the new scheme, the savings would be about 3 per cent of vehicle prices.
“We are still struggling in getting the new Euro IV vehicles operating smoothly. Many of these vehicles we brought in under the grant scheme had problems with their engines.”
Financial Secretary John Tsang Chun-wah also proposed making capital expenditure on environmentally friendly equipment 100 per cent tax-deductible in the year it is bought.